Taiwan is considering the use of wood pellets to help boost its use of renewable energy, according to a report filed with the USDA Foreign Agricultural Service’s Global Agricultural Information Network. The opportunity could translate into a $300 million opportunity for wood pellet producers.
The GAIN report, filed in November, indicates Taiwan aims to expand its use of renewable energy by 20 percent by 2025 and reach net zero emissions by 2050. Currently, renewables account for less than 10 percent of total energy output in the country. The use of wood pellets is one green energy option being explored by Taiwan to boost its renewable energy production.
According to the report, Taiwan aims to have 778 megawatts (MW) of biomass energy capacity in place by 2025, enabling 4.1 billion kilowatt hours (kWh) of generation.
The state-owned power enterprise Taiwan Power Company (Taipower) in 2022 decided to convert a 500 MW coal-fired boiler at its Kaohsiung Hsinta Power Plant to wood pellets. The report states this is the first project in Taiwan that aims to convert a decommissioned coal-fired unit to biomass energy. The new wood pellet heat boiler is set to begin operations in 2025 or 2026. According to Taipower, the converted biomass facility will consume approximately 1.7 million metric tons of industrial grade wood pellets annually.
Taiwan has essentially zero domestic wood pellet production and lacks sufficient wood resources to support large-scale wood pellet production, according to the report. Total domestic production is currently in the range of 300,000 to 400,000 metric tons of non-industrial wood pellets annually. As a result, Taipower will have to import the vast majority of wood pellets needed to fuel the facility. The majority of those imports are expected to come from Southeast Asia and North America.
According to the report, Taipower intends to procure the annual 1.7 million metric tons of wood pellets through open tender, with a contract duration of 10 years. The tender is expected to be published during the first quarter of 2024.
Additional pellet demand could be created in the future if a supportive policy framework is put in place. The report cites the U.S. Industrial Pellet Association has estimating Taiwan’s wood pellet import volume could reach up to 10 million metric tons if that policy support is realized.
A full copy of the report is available on the USDA FAS GAIN website.
